Fiscal stress in local governments has reached catastrophic levels in Michigan, which has implemented emergency management legislation in an attempt to keep apace of the problems it faces, including Detroit’s bankruptcy. It is time to consider what kind of public administrator is needed to address the problems of modern fiscal distress. Whereas the political approaches and policies for emergency financial management across the country may differ, the emergency manager can still bring successful generalized approaches and practices to many problems. This research studies two such bureaucrats in Michigan, one who has been instrumental in the development of emergency management policy for decades and one who is bringing his skills in corporate bankruptcy counsel to task.

Introduction: Emergency Financial Management

When local governments’ financial conditions sink from fiscal stress to fiscal distress, the federal system dictates that higher level governments exert their authority to correct the situation. The pace and breadth of such situations has grown dramatically in recent years, as more states have enforced their responsibility over a local government’s inability to balance the budget. As Dillon’s Rule prescribes, the state-local government relationship is an arrangement of responsibility:

Municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. If it may destroy, it may abridge and control. (As cited in Gere, 1982 , p. 273)

Like a cancer survivor who is weakened after the painful chemotherapy and a fear of recurrence, so too do the local governments in Michigan wonder whether the treatment of their conditions will ultimately lead to a full recovery or allow a relapse. The state has cycled through a series of legislative measures to address severe fiscal distress in local governments since 1988. The Great Recession has added catastrophic declines in Michigan’s manufacturing base and real estate values, necessitating significant reductions in expenditures for most all categories of government ( Skidmore & Scorsone, 2011 ). Several cities—including Flint, Pontiac, and even Detroit—have been forced to cede control to the state government. Few of those local governments have emerged from state control; those that have are markedly different entities today, for better or for worse. When the dust has settled years from now, the communities and the state will have to determine whether the emergency financial managers charged with structurally rebalancing the budgets of the local governments caused irreparable ancillary damages.

What makes for a good emergency financial manager? Distinct from mayors or city managers whose tenure may coincide with a period of fiscal distress, emergency financial managers are an administrative rarity whose profile has risen since The Great Recession, at least in the handful of states that have provision for their appointment (including Michigan, Rhode Island, and Pennsylvania; Pew Charitable Trusts, 2013 ). As an official appointed by a higher authority, they harbor some of Weber’s (1946) traditional leadership qualities, yet they must also be charismatic to gain support for their controversial cutbacks necessary in times of fiscal distress. Most importantly, the emergency manager (EM) exercises a level of legal-rational authority necessary to wield the hatchet that cuts through financial entanglements. There is no ideal type of emergency financial manager, but there may be some transcendent qualities of those administrators who effectively confront fiscal distress among the political, social, and economic turmoil that necessitated their appointment in the first place.

By the authority of Public Act 436 of 2012 , the Local Fiscal Stability and Choice Act (Legislature of the State of Michigan, 2013)—the fourth and most recent iteration of state financial stability legislation enacted since 1988—an EM has been dispatched to many local governments to confront the structural imbalances and right the fiscal ship: “Upon appointment, an EM shall act for and in the place and stead of the governing body and the office of chief administrative officer of the local government.” In essence, the lawmakers of Michigan have sanctioned a bureaucratic coup in hopes of staving off local bankruptcies, supplanting elected officials with EMs who, more often than not, serve as hatchet men (and women) in the budget rebalancing process. These appointments usually equate to cutback management tactics, as any options for raising revenue through improved services or organic growth have long since passed. It may not be as rash as United Auto Workers President Bob King rallied in March 2011—“Do you want dictators or democracy?”—but the EM supersedes local political decisions and must proceed with consideration of local needs.

Public Act 436 is both political and apolitical at the same time; it was passed by the Republican-led legislature and approved by Republican Governor Rick Snyder as a response to the referendum in November 2011 that repealed the previous EM law. That referendum succeeded by virtue of strong support from Democratic districts, especially in the major cities of Michigan. Yet for all the political accusations surrounding the enactment of PA 436, it is essentially a fiduciary appointment that spells out an administrative responsibility in getting a local government’s financial condition on a sustainable course. Furthermore, previous iterations of this legislation were exercised by a Democratic governor on several occasions. The EM’s authority to make painful decisions against the wishes of the community’s duly elected leaders can appear politically motivated, but the principle of a balanced budget and long-term fiscal health knows no party lines.

The outcomes of such appointments hinge to some extent on the EM’s approach to the job, which is not dictated by the legislation that describes the procedures for putting the EM in place. There is little history to follow and few examples that an EM can draw from when confronting a city in dire financial straits. The EM is charged with making radical reforms at the structural level, requiring a firm authority and sense of righteousness to uphold the hypothesis that Ammons, Smith, and Stenberg (2012) offer for cities in deep trouble:

Local governments across the nation will respond to severe financial stress by imposing on themselves fundamental and permanent changes in their services and structures, or will have such changes forced on them by their states. These changes will be lasting, so as to ensure not only survival from the immediate crisis but also avoidance of distress from a similar cause in the future. (p. 67S)

As of this writing, there are four municipalities and three school districts in Michigan under control of an EM, while an additional nine local governments are entering or exiting the process through a review or consent agreement with the state ( Department of Treasury, State of Michigan, 2014 ). Detroit is the largest of these governments, with the most severe problems as EM Kevyn Orr is leading the city through Chapter 9 bankruptcy proceedings that began a scant 4 months after his appointment to the office in the spring of 2013. The City of Pontiac had been under emergency management since 2009, and the third EM appointee, Lou Schimmel, finished his job in August 2013 as he reported to the governor that the city’s finances were on a sustainable track. Whereas Mr. Orr is a relative newcomer, Mr. Schimmel has tenure as an EM who helped author the various legislations that have empowered him in three different appointments to troubled local governments. On the eve of Orr’s appointment by Governor Snyder, Schimmel offered advice and insights into the eventual EM of Detroit in an interview on the local public radio station: “This is not a job for a numbers guy who sits in an office and crunches numbers” and that the city council “still reject me” among his other cautions about the difficulties of the job ( Wright, 2013 ).

The two EMs confronted similar problems at different scales, so a comparison of their job performances can only be judged in relative terms. Would Schimmel be successful negotiating with the big New York banks if he were running Detroit? Would Orr be able to relate to the people of Pontiac at the street level? Schimmel had tacit support from the mayor and the Oakland County Executive (where Pontiac is located) while facing opposition from the Pontiac City Council and the municipal service labor unions ( Blitchok, 2013a). Orr has allies in the statehouse and business community as he confronts a disjointed City Council, big labor unions, and a polity distrustful of outsiders ( Davey, 2013 ). Although they are in unique contexts, there may be some opportunity to generalize lessons for emergency financial management from a comparison of their styles and practices thus far. As fiscal distress continues to plague local governments world-wide, it will be beneficial to supplement the literature about causes, consequences, strategies, and tactics with a study of the human aspect. There is plenty of attention paid to emergency management but little to EMs. Public administration research tends to avoid ad hominem prescriptions, favoring more generalized notions of “professionalism” ( Stillman, 1977 ), yet a special situation calls for such study. What kind of attitude, skill, and bureaucratic ethos is needed for this job? What ideals should we hope to fulfill in the appointment of an EM?

Perhaps comparing fiscal distress to cancer at the outset was misdirected; a better analogy may be to that of an addiction. As presented in the Department of Treasury’s 12-step “Summary of the Local Fiscal Stability and Choice Act Process” ( Department of Treasury, State of Michigan, 2014 ), emergency financial management is a recovery program. If local governments are addicted to fiscal distress—a not wholly implausible perspective when considering the conflict between the costs of political promises and the reality of administrative accounting—then the EM is the mentor who imparts tough love tactics. Whether healer, mentor, or hatchet man, the EM is in a new class of administrators who are confronting a particularly devastating condition ( Davey, 2013 ).

The research literature on fiscal distress management is robust, yet it has focused primarily on the processes, not the people, with few exceptions ( Elling, Krawczyk, & Carr, 2013 ; Perlman & Benton, 2012 ). This article foregoes a formal literature review—as can be found in several recent articles on emergency financial management practices ( AlBassam, 2011; Ammons et al., 2012 ; Coe, 2008 ; Skidmore & Scorsone, 2011 )—in its differentiated purpose to provide some insight into the people who orchestrate recoveries and what administrative leadership and managerial traits they can offer for future practice.

Pontiac and Detroit were selected as the subjects of this research for several reasons. The cities share some characteristics that are key factors in their fiscal distress: a history of racial issues, dependence on automotive manufacturing, and strong union labor influence. The coverage of their declines and (anticipated) resurrections in the media has been extensive. Yet they are different places, and their appointed EMs have different approaches whose effectiveness will be judged in time. Schimmel has had years of experience in Michigan squarely confronting fiscal distress in a variety of arenas, “the dean of the emergency managers” (County Executive Patterson, as quoted in Blitchok, 2013a ). Orr was a private counsel with a specialty in corporate bankruptcy proceedings, promising Detroiters on his first day as EM, “I want to offer a sincere olive branch and an opportunity for us to work together” (as quoted in Guillen, 2013 ). The contexts and individuals in this research provide perspectives that can help to inform what makes for an effective emergency financial manager. As technical and managerial solutions to fiscal distress are offered in the academic literature, it makes sense to include some investigation into the type of person who can effectively advance such solutions.

Pontiac: The Hole of the Donut

The year 2011 was bittersweet for Pontiac. As the citizens of this rust-belt archetype celebrated their city’s sesquicentennial anniversary, the local government reeled under the pressures of fiscal insolvency. After paying the costs for the already severely reduced police, fire, and emergency service departments, the city’s budget would have less than US$1 million left for everything else it would need for the year. The streetlights, parks, garbage collection, and all other municipal services and salaries for this city of 60,000 residents would have to get by collectively on less than the pay of a starting lineman for the Detroit Lions football team. Add in a growing crime rate, increasing unemployment, corrupt school board, collapsed real estate markets, and mismanaged public policies, and the city’s problems became more than just economic anomalies.

The politics of prevention were rampant; Pontiac’s legislative inertia (or lack thereof) shoulders much of the blame for its suffering. Failed public projects, unfavorable lease arrangements, the inability to secure a viable future for many facilities, and blatant corruption in the leadership of the city left the administration hamstrung. More often than not, pressing issues became secondary to the political positioning over the issue itself. A zoning decision became a racial battle, park maintenance and police patrols became conflated, school choice undermined labor efforts, and neighborhood boundaries became territorial battles over city resources. Decisions by political leaders were slow to come and often left administrators with objectives that were impossible to achieve.

Pontiac’s situation brought stark realizations of social, political, and economic issues, even though it is located in the center of one of the wealthiest counties in the nation. The county was divesting itself of property in the city’s borders at losses to avoid legal entanglements that might crop up due to the degrading condition of facilities that were leased on its properties. Appeals by Pontiac’s leaders for help from the wealthier neighboring cities were given shrugs that pleaded of economic difficulty, NIMBY mindsets, or outright denials of concern despite our current understandings of regional effects. It appeared as though Oakland County thought Pontiac could just disappear, given enough neglect; it would be the hole of the donut.

Schimmel is a forthright manager who makes decisions that may not suit everybody, but he is clear in his reasons and process ( Blitchok, 2014). He is a methodological hatchet man who bluntly states the facts and communicates the bad news to the city at regular intervals ( City of Pontiac, 2014 ). Schimmel was an author of the state’s EM policies and has served longer than anybody in the state in that role. He has eaten enough sacks of bitter public outcry to fill council chambers during his long and varied career as an EM in Michigan. He works with his sleeves rolled up and does not politick, despite his conservative leanings ( Holeywell, 2012a). Like a true public servant, his idea of success is working himself out of his job because when the public problem is solved, the policy should be dissolved.

During his service as the EM of Pontiac, several extreme measures were taken that will have long-lasting effects, including the dissolution of the police, fire, waste and lighting maintenance departments, leasing of the waste water treatment plant, and sale of several city properties ( Blitchok, 2013b). He all but closed communications with City Council and suspended their pay as he concentrated on liquidating the liabilities. At the end of his term, he left his lieutenant in place to ensure that the radically reduced 3-year budget plan for Pontiac would be implemented during the transition period with reserved hopes that the structural balances would not be tipped when the state ceded control back to the elected officials. Yet he also acknowledged the difference in his priorities as EM from those of the City of Pontiac:

I was all about the money . . . However, when I left, I could have taken the position of staying a lot longer. The reason I didn’t stay a lot longer is that I felt we needed to get on with the process of turning the city back. (As quoted in Blitchok, 2014 )

Detroit: Motoring Into Bankruptcy

The chain of events leading to Detroit’s current situation is bizarre and depressing. The city serves as a distorted realization of the American Dream, made manifest in a sprawling mess of low-rent tinderbox houses, a “Gangsta Mayor” who used the city as his personal playground, and a legacy of inept governance in the context of the nation’s largest industry. From the underfunded public sector pension obligations to the outright neglect of crucial infrastructure, the whole of the Motor City is culpable for its fate at this point as it collapses in a textbook example of organizational implosion ( Anderson, 2011 ; Bozeman, 2011 ).

Amid legal battles and public outcry, Governor Snyder appointed an EM to deal with a structural deficit that was bleeding into US$18 billion of municipal debt. Citizens were either fleeing the city or circling their wagons, depending on their level of resolve and ability to escape the urban nightmare that has been Detroit since the Great Recession began. Safety forces were reduced to skeletal levels, street lighting was turned off, and private organizations were contracting for their own private security patrols as some brave entrepreneurs tried to keep a spark alive in the Downtown and Midtown districts. Whereas appointing an EM to avoid bankruptcy in smaller local governments like Flint, Pontiac, or the handful of school districts deep in the red could be kept relatively quiet and contained, Detroit’s fiscal problems were keeping pace with its national notoriety. The repercussions of a bankruptcy at this scale would affect not only the rest of Michigan but also Wall Street and Washington, D.C. Institutional bondholders and Federal agencies were watching the situation unfold at an accelerating pace in the spring of 2013 as then-Mayor Dave Bing warned that payrolls would not be met and retired city employees would have their benefits threatened by insolvency.

Orr is a politically correct legal counselor whose professional specialty in bankruptcy law bridged the New York City–D.C. gap. He sat down with the high-priced legal representation that the elites of Chrysler could muster in 2009 to get a U.S. Government bailout. He has some faint tendrils in his personal history connecting him to Michigan but otherwise is a stranger in a strange land. He is Black, like the majority of Detroit’s residents, but will remain in Detroit only as long as his job requires. Orr is a highly tuned and balanced instrument put in the most contentious, corrupt, and politically charged situation one could imagine. He took a pay cut in exchange for a public profile and, like any attorney worth his weight in bus stop bench advertising, he knows that losing a big case can still be a good thing.

Just four months into his 18-month term as EM, Orr pushed forward with filing Chapter 9 bankruptcy proceedings for the City of Detroit. The scope of dysfunction, dissent, and debt left little choice. Up to that point, Orr had maintained a cautious optimism based on the notion that when things are so bad, any changes must be an improvement ( Guillen & Helms, 2013 ). His communication with the public was limited, although he did try to integrate some local leaders (going so far as to hire the President Pro-Tempore from Detroit City Council to work in the EM’s office at three times his previous salary from the City). Although bankruptcy seemed inevitable, Orr spent enough time and effort at the beginning to demonstrate that he tried, without trying the limits of Michigan taxpayers’ patience as the State Treasury floated the funds for the evaluation period of the emergency management process.

Swinging the Hatchet

The legislative acts that created the EMs set the parameters of the EM’s existence, much like the U.S. Constitution describes how the country is to be organized. Yet as Wilson (1887) lamented the U.S. Constitution’s lack of administrative instructions at around the same time that Pontiac was founded, so too does the EM policy neglect to say how to manage the situation. Weber (1946) held that legitimate authority for administration in the modern world came from rational and legal origins, whereas charismatic authority and traditional authority were from the less modern, pre-industrial epochs. Yet the modern type of authority was short-lived in Detroit because it needed a modern type of society to support it. It is an ideal type, and Southeast Michigan has never been ideal, even when it was good. Bad governance, racial conflict, socioeconomic disparities, and shortsighted planning have wrecked the area, supplying the factors for a significant organizational disaster ( Bozeman, 2011 ). To this day, charismatic and traditional authorities have predominated in public service for Pontiac and Detroit.

The common core to Schimmel and Orr is their belief in the ability to solve Pontiac and Detroit problems through a high degree of technical competence founded on Weberian legal-rational authority; their resumes and the votes of confidence from the Governor’s offices speak to that aspect. They each have some qualities of charismatic authority, although of a different timbre, as well. It could even be argued that Schimmel has some vestiges of traditional authority by virtue of his seniority in Michigan’s political economy, while Orr was selected with some credit to his affiliation with a powerful corporate law firm. The commonalities in their authority do not necessarily extend to shared approaches to practice, however, as they have worked in circumstances that do not occur regularly.

Pontiac, Detroit, and every other case of fiscal distress should be classified as phenomena; otherwise, we would have the ability to alleviate the fiscal distress from a prescribed model derived from empirical study. These cities demonstrate two end-states from a complex order of events that is inherent to the American Rustbelt, with as little guidance to borrow from the well-ordered sterility of Weston, Florida ( Holeywell, 2012b), as from the littered housing collapse of Stockton, California ( Malanga, 2012 ). Competence only goes so far in new contexts; it can be described on a resume, but the specifics of any situation can quickly muddle its effectiveness. All the accounting and bureaucratic savvy that can be mustered have little impact on the all-too-real outcomes of unanswered 911 calls on dark streets.

There is a spectrum for each EM’s approach to the various aspects of fiscal emergency, although that spectrum has been produced by the prismatic effect of the cutback management hatchet’s shine. The EM can fall to the side of strict financial receivership with little nuance to public relations or come to the job with a consensus-building attitude that strives to make the budget fit the polity’s needs. From a normative standpoint, the latter end is favored by communities under fiscal distress while the former approach is better aligned with the state’s objectives of fiscal solvency. This is not to say that there should be room for creative accounting or political machinations to influence the EM’s decision making but rather that there is a scale of tone to the reactions appropriate to each context and its limitations. The aspects that are most open to the actual manager, as opposed to the emergency or the policy that determines the emergency (and the appointment of the manager), include their professional attributes and personal qualities: attitude, skill, and bureaucratic ethos. The declaration of a fiscal emergency demands a “can-do” person who can navigate some confrontation without presenting a combative attitude (Schimmel, in Wright, 2013 ). Too many communications can hinder progress as opponents find more fodder for debate, but poorly worded memos or terse announcements are also susceptible to scrutiny despite legitimately good intentions. The fact that the state government declared a fiscal emergency means that time is of the essence, so patience must be a carefully wielded negotiation tool with citizens, creditors, and employees. There is immediacy, but rash and under informed decisions can lead from bad to worse. The skill of the EM includes legal, financial, managerial, and political capabilities that are vetted by the appointing authorities for each situation. Finally, the bureaucratic ethos encompasses not only the deontological/teleological spectrum in the EM’s approach but also the level of administrative savvy that may be applied as the job spans the administration-politics divide.

In most of the aspects, Mr. Schimmel scores “higher” than Mr. Orr, although not necessarily by virtue of his singular character. Pontiac’s citizens were provided regular and detailed communications from the EM’s office that explained his decisions in clear terms. Mr. Schimmel was aggressive in tackling the issues to the fullest extent of his authority, such as disbanding the Pontiac Police and Fire Departments, as well as the municipal waste services (those services are now provided by contracts with the county, neighboring township, and a private company, respectively; Blitchok, 2013b ). Orr has put his skills in legal and financial matters to work for Detroit, taking similar steps at a more measured pace. The bureaucratic ethos of Schimmel has leaned more toward the teleological as his familiarity with the area and the EM policy has enabled him to drive toward objectives with more managerial strategies. Orr is new to the area and being watched closely; thus, he has been careful to work within the deontological boundaries of the EM policy procedures. This does not mean that Schimmel is the better EM, but rather that the approach he used is different and is apparently proving relatively effective for the situation in Pontiac. Detroit’s fiscal emergency has different constraints on Orr’s options and his autocracy is subject to greater scrutiny by virtue of a constituency that is more than 10 times larger. He has indicated that the most controversial issues will only be decided when the decision date is overwhelming and unassailable ( Guillen & Helms, 2013 ).Orr is displaying a fairly balanced and cautious approach in many aspects, while Schimmel brandished his axe with authority to enact his reforms in Pontiac.

Schimmel has worked as an EM in several small, disparate jurisdictions. His track record is mixed, as cities and school districts that were under his emergency rule continue to flirt with dysfunction. Nothing has come to save Schimmel’s cities—such as a billionaire’s massive speculation to revitalize the downtown—although Pontiac’s location is surrounded by the rising tide of economically rebounding Oakland County. Orr has a large district of despair and frustration where the politicians and profiteers are squabbling over bits of federal government cheese, while the surrounding Wayne County governments features regular scandals being exposed on the national news. Orr is well aware of the scrutiny and is practiced in managing media as he weighs the heft of the axe in his hand. Whereas Schimmel publicly displayed the dysfunction of Pontiac by holding downtown traffic hostage to a condemned tunnel, Orr staged a bus tour of Detroit’s ruins for creditors who conceded another penny on the dollar to be spared the uncomfortable publicity. These maneuvers speak to the need of broad exposure and awareness of the problems, notwithstanding the inconvenience and embarrassment to the citizens. The tactics have matched the severity of the problems in most cases, but the ancillary long-term effects to the cities’ reputations must be considered.

The specific measures that the two EMs have taken fulfill the expectations that they are hatchet men. Special interests have leveraged media outlets to describe the plights of pensioners, public safety employees, social service agencies, and other parties that are at risk of cutback management. Schimmel reduced Pontiac’s municipal payrolls to a bare minimum of staff ( City of Pontiac, 2014 ); City Hall is sparsely populated by a skeleton crew of contract managers and administrators who embody the New Public Management (NPM) mantra of “steering, not rowing” ( Gaebler & Osborne, 1992). After a year, Orr is still entangled in a drawn-out process of evaluating how bad the situation really is, what resources might be available, and who is willing to work with him ( Bomey, 2014). While the Detroit Institute of Art’s assets are being eyed, the crooked deals from past administrations are being righted by the bankruptcy court. Taxes and fees have increased as services have been outsourced to other local governments or private companies, all in the name of a balanced budget. The pressures of declining revenue and increased short-term and legacy costs required fast action without the luxury of public deliberation.

Schimmel made it clear that he wants to leave Pontiac in a state that cannot deteriorate back to a structural imbalance in any foreseeable future ( Blitchok, 2013b). Fulfilling this objective will indicate that either the community has truly solved its problems or the economic conditions will improve so that any of the old problems that rear up can be adequately absorbed. Orr is continually questioned about where he thinks Detroit will be at the end of his 18-month appointment. His answers are positive and hopeful, but with little benchmarking other than the clean slate of a municipal bankruptcy. Schimmel left when the governor approved his assessment of the job as done. Orr will be sent back to Washington, D.C., when Detroit is tired of him (or he is tired of the job—whichever comes sooner).

Concluding Lessons

The EM is an ideal type, so far as the legislation prescribes. The appointment of an EM carries the expectation that the problem will be solved, perhaps even in a single 18-month term. The language of the policy is intentionally vague when it comes to knowing when the job is done ( Department of Treasury, State of Michigan, 2014 ); in so many words, the EM will recommend a sustainable 2-year budget to the authorities and wash his hands. This means that the end-state of the fiscal emergency is subject to the EM’s assessment, which is closely related to the EM’s approach to the job. Having some consistency in the interpretation of the job, including more detailed notions of when the financial emergency is cleared, would allow for some consistency (or idealism) in the appointments as to the qualities of the appointed EM. This would be a step toward a more transparent process, much like having hiring standards for any number of other civil service appointments.

Transparency should stand as a principle of EM practice, especially in contrast to the self-serving conduct of the governments that sank their cities into fiscal distress in a series of events that were outside of the public’s attention. Michigan’s conditions come from a palpable hostility between the urban Democratic strongholds and the Republican outposts that foster distrust. Rampant corruption, incompetence, and a legacy of mismanagement have been the norm due to a lack of transparency as competing political interests have bled into administrative practices. Best practices and bureaucratic ethics are sacrificed as policy battles affect job performance; administrators must act to protect themselves from the turmoil that caused and aggravated the conditions of fiscal distress.

Yet many of the first-order solutions implemented by struggling communities since the era of NPM, such as contracting private companies to provide public services for short-term savings, have neither improved the public’s access to information nor the quality of government’s performance reporting. If there is a silver lining to the EMs’ predilection for NPM practices in Michigan, it is that the public’s objections to the very process of an EM has been accompanied by a higher degree of scrutiny and a well-met level of transparency by the EMs ( Anderson, 2011 ). Whereas the negotiations and backroom deals of the old administrations were conducted out of sight (but with tacit understanding of the public that such was the case), reorganizations and new contracts made by the EMs are publicly debated, even if the outcomes are not politically popular.

Furthermore, there needs to be an exchange of communication from citizens to the EM’s office that is appropriately supported, such as linking social media to the city’s dashboard and holding regular public forums. Citizens need to be privy to the real conditions in their government and the proposed solutions to legitimize the EM’s authority, especially as they feel the appointed EM has usurped their local control, such as it was. The EM needs to demonstrate a connection to the jurisdiction and a willingness to understand how the decisions will be felt at the street-level. The EM cannot administer from afar nor deny the lived experience, as seen in the criticism of Hurricane Katrina relief by the Federal Emergency Management Agency ( Schneider, 2005 ). Schimmel’s personal history in Pontiac has served him well, while Orr’s tenuous connection to Detroit was strengthened by the proposal to force the City’s creditors to take a bus tour of blight. Under the bigger concern for having a balanced, sustainable budget is the need for the state to emphasize that the EM is ultimately there for the citizens’ welfare. The state needs to give due consideration to the character and the competence of the EM in respect to the context of his or her appointment, and then follow through by supporting opportunities for citizen-government connections through the smaller, but nonetheless meaningful, component actions of the emergency financial management. The EM may be displacing the authority of the elected representatives in the name of fiscal responsibility, but that does not dismiss the need for a collaborative attitude ( Demir & Reddick, 2012 ).

Until there is a graduate program available in emergency financial management that has distilled the best practices into a teachable orthodoxy, we are left with a small sample of observations. The fiscal distress literature emphasizes prediction over reaction ( AlBassam, 2011; Ammons et al., 2012 ; Coe, 2008 ; Kloha, Weissert, & Kleine, 2005 ; Lavigne, 2011 ; Skidmore & Scorsone, 2011 ), but neither the tools nor the political will is up to the task. Past practices have generally focused on cutbacks and outsourcing ( Honadle, Costa, & Cigler, 2004; Perlman & Benton, 2012 ), as the available resources and management capacity are not geared for the challenges of sustained recessions. Until predictive monitoring models are given the legislative teeth to intercede before fiscal stress becomes distress, the specific tactics will be limited. The study by Elling et al. (2013) shows that buy-in from the public on cutback management can be helpful, but such studies take more time than financial emergencies can afford. Auditing local government services and cross-indexing them to public sentiment about such sentiments would be an ideal approach for the EM, if the resources allow.

The related discipline of emergency disaster management could provide some insight with further study as it offers some approaches for implementing immediate changes under times of stress. However, as the Fukushima nuclear disaster in Japan is still fuming, the risks of hasty emergency management practices cannot be underestimated ( Nakamura & Kikuchi, 2011 ). There is also much to be learned from the disasters that we could reasonably expect to have happened, like Hurricane Katrina and the Federal Emergency Management Agency response ( Schneider, 2005 ). A comparison across the disciplines may inform some crossover lessons as we await the long-term effects of disaster and financial emergency recoveries.

This study briefly described two EM cases from Michigan, the dismal laboratory for such an experiment, hoping to offer some best practices for the administrators upon which we can build a theory and test methods of emergency financial management. Transparency, patience, administrative competency, and coherent decision making are good starting principles for EM practice. Due consideration of context and integration with the polity determines much of how to apply those principles. The EM’s role of bureaucrat intersects with the sociopolitical environment of fiscal distress, so frequent and clear information is needed for the polity to understand what is happening from their appointed manager. The success of the EMs will require more time to evaluate, which is unfortunate for the localities that serve as the testing grounds as they endure drastic changes to their structure, function, and character.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article:

The author received financial support for the research, authorship, and publication of this article through the Korea Social Science Research Fund granted through Incheon National University.

Footnote

Author’s Note

The supporting information about Detroit and Pontiac is either widely reported in the news media, readily available from the cities’ records, or from firsthand observation by the author (who lived in Southeast Michigan from 2010 to 2013), including a personal interview with Lou Schimmel in 2012. As Orr’s term of service has been extraordinarily well documented by various media since his appointment and his schedule is unrelenting, there was no direct communication with him for this research.

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